I have been thinking about the high volatility of this market and I realized that the absolute scaling does not make much sense. We are moving in between 4k and 20k in the matter of weeks. 4000 to 4500 is not the same difference as 10000 to 10500 while considering the profits. I think this is a mistake that most of us are making while making charts. In such volatility, log scale should be used to reflect the proportional changes.
In the chart you can see the downward channel adapted to log scale. Also all the support levels are presented.
These are the scenarios that I came up with:
1. a head and shoulders forms after 9k$ and with a strong signal we push out of the bear channel.
2. we bounce back from 8k$ support (from 02-feb). I don't think this will be strong enough to push us out of the channel
3. we bounce from the projection intersection 7k$ (green dash)
4. we bounce from 6k$ lowest of 2018
5. we touch the bottom of channel around 4k$-4.5k$ and finalize(?) the correction.
I personally believe that scenario 5 is the most likely as it represents a better correction.
Please let me know what you think in comments. Especially about log scale. I am learning so I am curious about opinions of more expert traders.
Have a great day.
In the chart you can see the downward channel adapted to log scale. Also all the support levels are presented.
These are the scenarios that I came up with:
1. a head and shoulders forms after 9k$ and with a strong signal we push out of the bear channel.
2. we bounce back from 8k$ support (from 02-feb). I don't think this will be strong enough to push us out of the channel
3. we bounce from the projection intersection 7k$ (green dash)
4. we bounce from 6k$ lowest of 2018
5. we touch the bottom of channel around 4k$-4.5k$ and finalize(?) the correction.
I personally believe that scenario 5 is the most likely as it represents a better correction.
Please let me know what you think in comments. Especially about log scale. I am learning so I am curious about opinions of more expert traders.
Have a great day.